City proposes Petoskey Pointe amendment, details not released

November 11, 2008|By Ryan Bentley News-Review Staff Writer

City proposes Petoskey Pointe amendment, details not released

Although not yet ready to share details publicly, Petoskey city officials reported Monday that an amendment has been proposed for the city's business agreement with the stalled Petoskey Pointe project's developers.

During a special city council meeting, city manager George Korthauer noted that Anthony Mavrinac, an attorney representing Petoskey on matters related to the downtown project, had presented development firm Lake Street Petoskey Associates with a proposed contract amendment, and that developers likely would be reviewing it further.

More to come

More discussion of the city's Petoskey Pointe legal concerns is expected at the next regular city council meeting, set for 7:30 p.m. Monday, Nov. 17, at city hall, 101 E. Lake. The council made plans for legal counsel to attend this meeting.

The city provided Petoskey Pointe developers with part of the land they would need for their hotel/condominium complex. In return, the business agreement called for the city to receive a $970,000 credit toward a $6 million-plus purchase of part of the project's parking garage.

Advertisement

As part of the contract, developers needed to have the project substantially completed by Nov. 2. But having seen work stall last year after losing financing, they failed to meet this obligation.

Following this default, it's possible for the city to exit its business arrangement for the parking purchase. Providing developers with additional time to fulfill their options is another option that the city could pursue, and one that some current officials have said they're willing to consider if new conditions - like verification of new project financing - are established.

Development partner David Jankowski recently told the council that a new lender had committed to the project, and that developers would like the city to provide more time.

Korthauer noted that city officials had provided some input for what conditions should be included in the amended agreement.

Noting that the city's copy of the proposed amendment contained some details that could be viewed as legal strategy, the manager said officials would need to check with Mavrinac before releasing it to the public to confirm that attorney-client privilege wouldn't be jeopardized.

From the audience, mayor-elect Ted Pall questioned why the details couldn't be made public, noting that the proposal had been revealed to developers.

Korthauer said he wasn't sure what version of the amendment had been given to developers, and that the details of legal strategy might have been removed from the copy presented to them.

Much of the council's recent discussion with Mavrinac has taken place in closed session. Noting that the council is unable to make decisions in such a setting, Pall asked how the amendment was pursued.

While Korthauer said the council showed consensus in favor of Mavrinac's suggested approach for the situation, he added that the attorney didn't need formal action to carry forward with his proposed strategy.

"It's in his hands to do it," the manager said. "He is the attorney representing the city. He did not require city council action."

Asked by a reporter if they could verbally share what conditions had been proposed for the amendment, Korthauer and mayor Dale Meyer declined to provide details. Again, they noted concern that attorney-client privilege might be violated.

Meyer added that any proposed amendment will be made public before it's finalized by the council.

On the subject of new financing for the project, Korthauer said an appraiser recently had visited the downtown construction site, but added that he hadn't received other details as of late.